Households and industrial customers in Bangladesh have been hit with an immediate significant gas price increase as state-owned Petrobangla struggles with mounting losses due to its monthly liquefied natural gas import bills, writes Amanda Battersby.

The state-run Bangladesh Energy Regulatory Commission on Sunday increased natural gas prices by an average 32.8%, effective from 1 July — the first day of Bangladesh’s fiscal year.

“The price has been hiked only to adjust the huge losses of state-run Petrobangla,” said commission chairman Monwar Islam.

Petrobangla is incurring reported losses of around $235 million each month as it imports LNG and then sells the gas at a loss to domestic customers.

Another media report claimed the national player had spent upwards of 80 billion taka ($946 million) in the 13 months to the end of May on LNG imports whilst only earning 18 billion taka from sales.

The opposition BNP party slammed the government’s gas price hike, adding that it would be organising widespread demonstrations on the streets.

Bangladesh today has two floating storage and regasification unit projects and there are also plans for an onshore LNG import terminal as the nation’s gas supply demand gap continues to widen.

Output at domestic fields, while increasing, has failed to keep pace with the burgeoning gas demand and the daily shortfall — without imported LNG — is around 800 million cubic feet per day of gas.

One source said the unit cost of imported LNG is 32.31 taka versus 7.35 taka for locally produced gas.

State Minister for Power, Energy & Mineral Resources, Nasrul Hamid recently said that renewed exploration is needed to try to discover new domestic gas resources.

Weekly

Bangladesh energy sector crippled by LNG imports